Did NCAA approve attorney expenses on Miami case?

Feb. 5, 2013
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Fans of University of Miami football have endured a nearly two-year NCAA investigation into the program and the athletic department at large. The NCAA now has an external investigator looking into the its own methods used in the case. / Mark Dolejs, USA TODAY Sports

by Daniel Uthman, USA TODAY Sports

by Daniel Uthman, USA TODAY Sports

A person with knowledge of the NCAA enforcement staff's working arrangement with the attorney for former University of Miami booster Nevin Shapiro told USA TODAY Sports that the enforcement staff received budget approval for up to $25,000 to cover expenses incurred by Shapiro's attorney related to depositions in Shapiro's bankruptcy case.

The person said the approval came from the NCAA's office of general counsel and its vice president of enforcement, Julie Roe Lach. The person spoke on the condition of anonymity because of the sensitivity of the matter.

This runs counter to statements made last month by NCAA president Mark Emmert. Emmert said in a teleconference with reporters on Jan. 23, "Any personnel decision, if it was a long-term personnel decision or a hiring of a general counsel or outside counsel, it's supposed to be approved by the general counsel office, and that was not done in this case. The general counsel did not approve the hiring of outside counsel to conduct these depositions. That's one of the issues that I've got to get to the bottom of and know how in the world that happened."

A day later, he released a statement that read in part, "Evidence shows the General Counsel's Office specifically told the enforcement staff â?? on at least two occasions prior to any arrangements being made with the attorney â?? that they could not use Shapiro's attorney for that purpose (to obtain depositions in the Miami case)."

Another person familiar with the matter who spoke on the condition of anonymity because of the issue's sensitivity said that the relationship between the NCAA and Shapiro's attorney Maria Elena Perez continued even after original investigators involved in the depositions left the case or were fired by the NCAA.

The depositions occurred as recently as October 2012, five months after an original investigator was removed from the case and seven months after another investigator left the case. A third investigator who was on the case but was fired by the NCAA in December had no dealings with Perez, the first person said. Emmert said the organization received the bills for expenses last fall.

"We stand by Mark Emmert's previous statement on the matter," said Stacey Osburn, the NCAA's director of public and media relations.

Shapiro, now serving up to 20 years in prison for a Ponzi scheme, has been a key to the NCAA's ongoing investigation of improper benefits involving University of Miami athletes and coaches.

Emmert pointed to the circumstances of the depositions and bills submitted to the NCAA by Perez for costs incurred as the catalysts for an external investigation into the NCAA's enforcement arm that began last week. The NCAA cited the enforcement staff's gaining information for their case against Miami from the depositions as improper.

"We discovered it most directly when invoices were presented later that year for legal work that had not been approved," Emmert said. "No one had approved the hiring of an outside attorney. And yet, some many months later a bill was presented to pay for those expenses, and it immediately raised the question, where the heck did this come from?"

The enforcement staff did not, the person familiar with the NCAA's agreement with Perez said, pay for Shapiro's attorney's hourly work, because billable work was explicitly not approved. What was paid, the person said, were fees for transcription, copying, document handling and the use of a court reporter. The person said approval for such payments went through the NCAA's general counsel and vice president of enforcement.

Though the alleged enforcement practices in the case have led to widespread criticism of the NCAA, enforcement guidelines in the NCAA Manual do not explicitly prohibit such arrangements with attorneys.

"The issue involved improper conduct within the enforcement program," Osburn said. "As it does not have subpoena power, the NCAA does not have the authority to compel testimony through procedures outside of its enforcement program."

According to the person familiar with the agreement with Perez, there never was an engagement letter, which is used to formally establish the attorney-client relationship, between the NCAA and Perez. Emmert said that discovering more about the deal between the NCAA and Shapiro's attorney is one of the top priorities in the external investigation, which is in its second week.

"One of the questions that has to be answered unequivocally is what was the nature of that contractual arrangement, and what was all of the activity that that individual was involved with?" he said. "There is some uncertainty about all of that, and it's one of the first orders of business for the firm that we've hired to investigate."